CHA, HUD pen agreement on program

February 19, 2013

The Chicago Housing Authority has entered into an agreement with the federal government that aims to provide more jobs and contracts to public housing and low-income residents.

The program, known as Section 3, started in 1968. Last year the U.S. Department of Housing and Urban Development found Chicago noncompliant with Section 3. Residents have also filed lawsuits related to the program.

Now the local and federal housing agencies are embarking on a five-year deal. The end goal is for at least 10 percent of the total dollar amount of all contracts covered by Section 3 go to Section 3 hires.

“CHA’s excited about this new partnership with HUD,” said Charles Woodyard, CEO of CHA. “Together we will ensure that goals of this new initiative are met so that Section 3 residents and other low-income Chicagoans are provided opportunities to advance their business and their careers.”

CHA’s track record on Section 3 is a mixed bag. A 2011 WBEZ report found that several years ago, 30 percent of new hires were designated Section 3 – the federal minimum. But in 2008 and 2009, for example, more than 70 percent of CHA new hires were Section 3. Still, in those two years, hundreds of millions of dollars were awarded in contracts, yet none of those involved Section 3-owned businesses. Other public housing agencies around the country have had much worse track records.

Four residents from the Altgeld Gardens development have filed a lawsuit under Section 3. A judge has ruled that one of those lawsuits can go forward. The resident involved in that case alleges that she hasn’t been hired under the program.

This new Section 3 agreement with HUD states CHA will require building trade contractors to submit payroll and hiring reports on a weekly basis. HUD will monitor progress. When it is infeasible for CHA to meet the numerical goals for employment, the housing agency must show HUD other economic opportunities that it provides to its resident and the community. Those opportunities may be educational, recreational, or youth-oriented. They can also involve learning enrichment, after-school programs, child care, senior services, and job preparation programs, as well as other economic opportunities. Noncompliance could cost CHA competitive grant funding.

Residents and stakeholders are skeptical about the agreement.

“Seems like a decision has been [made] and we haven’t be included in it. Once again we’ve been left behind,” said Dennis Hood, a CHA resident and owner of a contracting business.

Robert Whitfield is the attorney for the umbrella CHA tenants’ group. He said he’s not sure whether the voluntary agreement will turn the dime of resident hiring. The issue is bigger than CHA.

“I would like to see [CHA] use a lot more of their procurement power to force the union to get more residents into the unions as apprentices,” Whitfield said. “Until that happens they [HUD, CHA] can sign all the agreements they want but it’ll run into a dead end when contractors say they aren’t in the union.”

That’s a huge concern for Thomas Harris, secretary-treasurer of the American Allied Workers International Union. He said organized labor dictates the contracts. He said he’s trying to get his union to represent CHA residents so they aren’t shut out.

“Labor dictates what’s going to happen with the contracts and who the workers are going to be. They’ve been closed out of workplace because they’ve never been at the table to be represented in terms of their trades,” Harris said.